In imperfect competition,firms should produce and sell units until the ________ equals the ________.
A) average revenue; marginal cost
B) marginal revenue; average revenue
C) average revenue; average cost
D) marginal revenue; marginal cost

Question

Quizplus · Accepted Answer

In imperfect competition, firms should produce and sell units until the marginal revenue equals the marginal cost. This is because producing one more unit would increase revenue by the marginal revenue, but would also increase the cost by the marginal cost. The optimal level of production is where marginal revenue equals marginal cost.

In Imperfect Competition,firms Should Produce and Sell Units Until the ________